Reverse Mortgage Uses

HECM Reverse Mortgage Uses

What is a reverse mortgage? or H.E.C.M. (Home Equity Conversion Mortgage) and how can it help me? Our team will quickly and honestly tell you all about pros and cons, basic information, calculator, lenders we can choose from.

Reverse mortgage loans are a way for older homeowners to convert their home’s value into tax-free cash, without having to sell or move. Insured by the U.S. government, the Department of Housing and Urban Development (HUD) allows Homeowners who are 62 or older to borrow against the equity of their homes.

Reverse Mortgage Uses- The most common.

As Supplemental Income. A reverse mortgage is a special loan program designed to help seniors at home, mortgage-free in exchange for the equity they have built. HECM (home equity conversion mortgage) borrowers also choose to receive a monthly payment, lump sum payout or a line of credit. There are many uses for reverse mortgage payout that can help homeowners with all types of goals. The Reverse Mortgage Alabama team has many years’ experience helping clients in Birmingham Huntsville offices, and surrounding areas. Helping people explore the uses for reverse mortgage funds to determine if this type of loan suits their needs. If you have questions about reverse mortgage, contact our team today for honest answers and advice.

Reverse Mortgages have so many uses today.

Consumer Uses
• Eliminate current mortgage and payment.
• Eliminate HELOC that is due and payable in 10 years
• Use for medical expenses or in-home care
• Update or make repairs on your home

Bankers
• I can help when a retiree comes in with a HELOC that needs to be paid in full, but now their income doesn’t support a HELOC refinance
• One of your tellers recognizes a great customer is suddenly short on funds. Possible she lost income; could be from a loss of a spouse.

Investment Planners
• A Client has structured for every event retirement will throw at them except in home care.
• Your client could take out a Reverse Mortgage and leave all proceeds in the “growing” line of credit.
• A 65-year-old with a $400,000 house would have a line of credit of $155,000- at age 85 when he or his wife may have health issues the line of credit would then be almost $500,000!

Realtors
• Your age 62 and above homebuyers can use the Reverse Mortgage for Purchase to save a little money from the sale of their last home or be able to buy the home they want that was financially out of reach.
• A 70-year-old can purchase a $400,000 house by bringing $215,000 (includes closing costs) and the Reverse Mortgage provides the remainder to buy the $400,000 house using the Reverse Mortgage Purchase.

Elder Law Attorneys
• Same principal as above with investment planners. Your client could take out a Reverse Mortgage during the planning and leave all proceeds in the “growing” line of credit. This idea was on the cover of NAELA (National Academy of Elder Law Attorneys Journal Spring 2018.

In Home Care providers
• Same principal as Investment Planners except- maybe a client is using 6 hours a week. If their health declines and in a year or two they were needing 40 hours a week, they could have taken out the Reverse Mortgage 3 years prior. Using the 65-year-old with the $400,000 house. In just 3 years the credit line would have gone from $155,000 to $175,000. Also, if they set it up to pay monthly, the amount in the credit line still grows as its waiting to be paid out each month!

Mobility Specialists
• A Reverse Mortgage could supply the funds to widen doorways install grab bars, wheelchair ramps, bathtubs, stair lift, or elevator or anything else to make your clients be able to Age in Place!

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**The owner(s) retain title to the property that is the subject of the reverse mortgage until the person sells or transfers the property and is therefore responsible for paying property taxes, insurance, maintenance and related taxes. Failing to pay these amounts or failure to maintain the condition of your property may cause the reverse mortgage to become due immediately. A reverse mortgage is a complex loan secured by your home. Whether such mortgage makes sense for you depends on your financial situation and needs. For these reasons, you are required to consult with a qualified independent housing counselor and include family members and other trusted advisers before making this decision. This information is not from HUD or FHA and was not approved by HUD or any government agency.